President Trump recently ordered tariffs on Canadian and Mexico goods, citing the massive trade deficit the US has with these two countries. That was after he floated the tariffs earlier as a negotiating attempt to get both countries to strengthen their border security to stop illegal migration into the US. Not a peep about the illegal migration from the US into Canada but that is for another post. So the point is, what do the tariffs do and are they good or bad for the USA economy and for Canada's economy.
I would argue that in the short term, they will result in inflation as the increased prices of mostly raw goods will increase the costs of the processed and finished goods those materials are used in will have their prices increased. Even with the proposed tax reductions, those prices will still increase and the competing products will be able to increase their prices even though they will not have the increased tariff priced goods in their products.
In the long term, tariffs will have benefits and will actually stabilise prices and most likely put US made products at or below the target inflation rate.
HOW?
1. Tariffs on nations who gain a price advantage over America by using slave labour, child labour, extremely low priced labour and who have lower tax rates, less regulations and lower environmental standards will help stop them from subsidised by the US consumer.
2. Tariffs on countries who gain a price advantage by placing their own tariffs on American goods while increasing production in their own facilities thus increasing the economies of scale and shipping those products back to the US at value pricing with no tariffs. This will increase US manufacturing as the price advantage falls while shipping increases. Jobs in the US will be the result. Think China and India here where a pair of running shoes can be manufactured at a fraction of the USA cost.
3. Tariffs on countries who do not have any of these advantages, like Canada but do have differing regulatory costs and requirements. Think dairy where we do not permit certain growth hormones or antibiotics in our human consumed food or softwood lumber where the vast majority of Canadian lumber is from second groth timber and stumpage is far less because these lumber companies actually reforested after clear cutting 40 to 50 years ago and the rights were sold as assets. These tariffs, in the long term will result in Canada and the US both harvesting, mining, and extracting more of their own products to use in their own production and refining. Both countries will build and operate high tech manufacturing facilities to supply their own marketplaces.
4. The end result will have a twofold benifit as well as provide price stabaility.
A. Environmental. Les shipping of raw materials to be refined and processed in another nation cuts polution and carbon. Those same refined and processed resources will be use to manufacture finished goods which will be closer to the consumer so once again, environmental costs will be decreased.
B. Thousands of jobs will be lost in the transportation industry and AI will eliminate many more educated and skilled workers leaving a vast pool of educated, mobile and intelligent available. They can be quickly retrained to operate the high tech manufacturing facilities that can rise to compete against the Tariff goods coming in, at a lower long term cost in green, highly efficient facilities. Overall, a win win, in the long term for both Canada and they US.
Why has it never happened before?
Because we elect politicians who see their next job after being elected is to guarantee the next election win, for them and the party. With this goal, they will never, ever put in place any policy that may result in extreme short term pain for a strong likelihood of long term stability. Sovereign debt is the best evidence we have.
Trump does not care, he is not a republican so he does not care about their electoral chances in 2028. His vision is to get the US on track during his presidency, "clean out the swamp." and many in that swamp are also republican.
Will it happen?
Not by a long shot. The Republican congress and Senate are more interested in re election than the countries health so they will move to block everything he tries to do in this area before the mid terms. And if the Democrats win the house, that is a certainty.
Debts will continue to increase, sovereign and personal insolvency will happen and we will get bailed out by the WMF and WEF as we move towards globalism, 15 minute cities and a world reset. We will own nothing and "we will be glad about that." Or we will cease to exist.
My currant book is called after the reset, it is a fictional account about where we will be by 2050. In my book, those who are not happy about owning nothing get, repurposed, retrained or evicted. Hope it does not happen but as with my first book series which was eerily prophetic, it is a likelihood.
I would argue that in the short term, they will result in inflation as the increased prices of mostly raw goods will increase the costs of the processed and finished goods those materials are used in will have their prices increased. Even with the proposed tax reductions, those prices will still increase and the competing products will be able to increase their prices even though they will not have the increased tariff priced goods in their products.
In the long term, tariffs will have benefits and will actually stabilise prices and most likely put US made products at or below the target inflation rate.
HOW?
1. Tariffs on nations who gain a price advantage over America by using slave labour, child labour, extremely low priced labour and who have lower tax rates, less regulations and lower environmental standards will help stop them from subsidised by the US consumer.
2. Tariffs on countries who gain a price advantage by placing their own tariffs on American goods while increasing production in their own facilities thus increasing the economies of scale and shipping those products back to the US at value pricing with no tariffs. This will increase US manufacturing as the price advantage falls while shipping increases. Jobs in the US will be the result. Think China and India here where a pair of running shoes can be manufactured at a fraction of the USA cost.
3. Tariffs on countries who do not have any of these advantages, like Canada but do have differing regulatory costs and requirements. Think dairy where we do not permit certain growth hormones or antibiotics in our human consumed food or softwood lumber where the vast majority of Canadian lumber is from second groth timber and stumpage is far less because these lumber companies actually reforested after clear cutting 40 to 50 years ago and the rights were sold as assets. These tariffs, in the long term will result in Canada and the US both harvesting, mining, and extracting more of their own products to use in their own production and refining. Both countries will build and operate high tech manufacturing facilities to supply their own marketplaces.
4. The end result will have a twofold benifit as well as provide price stabaility.
A. Environmental. Les shipping of raw materials to be refined and processed in another nation cuts polution and carbon. Those same refined and processed resources will be use to manufacture finished goods which will be closer to the consumer so once again, environmental costs will be decreased.
B. Thousands of jobs will be lost in the transportation industry and AI will eliminate many more educated and skilled workers leaving a vast pool of educated, mobile and intelligent available. They can be quickly retrained to operate the high tech manufacturing facilities that can rise to compete against the Tariff goods coming in, at a lower long term cost in green, highly efficient facilities. Overall, a win win, in the long term for both Canada and they US.
Why has it never happened before?
Because we elect politicians who see their next job after being elected is to guarantee the next election win, for them and the party. With this goal, they will never, ever put in place any policy that may result in extreme short term pain for a strong likelihood of long term stability. Sovereign debt is the best evidence we have.
Trump does not care, he is not a republican so he does not care about their electoral chances in 2028. His vision is to get the US on track during his presidency, "clean out the swamp." and many in that swamp are also republican.
Will it happen?
Not by a long shot. The Republican congress and Senate are more interested in re election than the countries health so they will move to block everything he tries to do in this area before the mid terms. And if the Democrats win the house, that is a certainty.
Debts will continue to increase, sovereign and personal insolvency will happen and we will get bailed out by the WMF and WEF as we move towards globalism, 15 minute cities and a world reset. We will own nothing and "we will be glad about that." Or we will cease to exist.
My currant book is called after the reset, it is a fictional account about where we will be by 2050. In my book, those who are not happy about owning nothing get, repurposed, retrained or evicted. Hope it does not happen but as with my first book series which was eerily prophetic, it is a likelihood.
RSS Feed